What next after Brexit?

Economy A union jack and EU flag
ViewsJune 27th, 2016

What’s next after the vote to leave the European Union? Victoria Winckler sets out the issues the National Assembly for Wales needs to consider.

Wales has voted to leave the EU.  So far, the reactions have mostly been ones of shock, denial and anger – not dissimilar to the early stages of bereavement.  While these might be a natural emotional response it hardly helps to answer the question on many voters’ lips – what next? And more specifically, what’s next for Wales?

Economy

The First Minister has rightly said that one of his six priorities is to protect jobs. With 41% of Wales’ exports going to the EU at present the terms under which Wales’ businesses access the EU market will be critically important. Already there is uncertainty about the long-term future of Wales’ big exporters, like Airbus, Toyota and Ford. There’s also the risk of a wider recession at least in the short- to medium term.

But trying to protect what Wales has at present is not going to be enough.

Post Brexit, an economic strategy for Wales based on inward investment is not going to amount to much. Now is the time for a fundamental shift of approach, to focus on start-ups, growing SMEs and supporting the so-called Foundation Economy.  And there needs to be an emergency action plan for farming that sets out plans for the sector when the Common Agricultural Policy has gone.

It has also become crystal clear that the UK (or whatever remains of it) needs an effective regional policy, in which growth and job creation spreads to all areas not just in London and the big cities. The Welsh Government should be at the forefront of lobbying for a new regional policy.

And it’s not just the number of jobs that matter – it’s their terms and conditions too. Wales has a quarter of a million jobs that do not pay enough for even a basic standard of living – it’s time to implement the real Living Wage across the economy and to reduce the prevalence of insecure jobs.

Public Finances

Brexit brings huge uncertainty to Wales’ financial settlement and its public services. While the Chancellor has said he has no immediate plans for an emergency budget, there is every possibility of significant further cuts to public spending in the future.  And of course there’s the end of EU funding as well, although this is by no means as significant a loss as many have suggested.

This means that the Assembly and all public bodies need a ‘Plan B’ to cope with more austerity and loss of EU monies, as well as to hold the Leave camp to account for promises made during the campaign.

There also needs to be some new thinking about Wales’ future funding. We can tinker with Barnett in the short-term but if Scotland leaves the UK then Barnett is redundant. What do we want to replace it? Should we be grabbing tax-raising powers with both hands?

New Legislation

As the UK gradually untangles from the EU, rafts of legislation that were previously incorporated into UK law will no longer have effect. Some may welcome this as the very thing they voted for, but many others may be concerned that Wales loses big chunks of environmental, equality and human rights, consumer and employment protection. The Assembly needs to be clear if it wishes to reinstate the provisions of any EU legislation, for example on recycling or water quality, and draw up a legislative programme to do so.

Unite People and Communities

The referendum campaign has exposed and exacerbated divisions in Welsh society – between old and young, between white Welsh or British and other ethnicities, between professionals and people in semi- and unskilled jobs to name but a few. Reports of racial harassment and abuse are on the rise, and young people are articulating their frustration about baby-boomers. ‘Community cohesion’ strategies have been strikingly ineffectual at anything more than generating reams of print.

There needs to be national and local leadership to build and maintain good community relations and to put equality and diversity at the centre of Welsh values.

Current problems haven’t gone away

For all the significance of the Brexit vote, the vast majority of people have carried on their lives exactly as before. The pressures on the Welsh Government of reducing poverty, meeting demand in the NHS, improving educational outcomes, improving transport and so on have not gone away. It would be criminal indeed if the changes that are urgently needed in Wales’ public services are shelved because of Brexit.  Yes there is huge uncertainty, but people still need medical treatment, still need good transport and the scourge of low incomes still need to be eradicated.

No doubt lots of emotions will be expended in the Assembly debate tomorrow, but people in Wales expect and deserve more than triumphalism or angst, depending on your viewpoint about the result. There must urgently be a comprehensive route map to see Wales through the next few turbulent years, one which recognises the deep sense of alienation and frustration felt by so many in Wales.

Victoria Winckler is Director of the Bevan Foundation. 

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